Blazing a new trail
a public-private partnership delivered hundreds of new and improved bridges -- and a blueprint of managing infrastructure projects
2015 PMI PROJECT OF THE YEAR FINALIST
BY ALMA BAHMAN PORTRAIT BY TERRY MANIER
The state of Oregon ranks as one of the top vegetable producers in the U.S. And to move all those tons of carrots, sweet corn, green peas and other produce, truckers rely on a complex network of bridges and roads that wind through forests, over mountains and across rivers.
The state's 6,700 bridges keep traffic moving—connecting millions of residents and powering an economy. But nearly half of the state's bridges were built before 1960. And in 2001, inspectors found cracks in some bridges that if left to deteriorate would soon limit weight loads and vehicle speeds. A 2003 Oregon Department of Transportation (ODOT) study estimated structurally deficient bridges would end up costing the state US$123 billion in lost productivity and 88,000 jobs over the following 25 years.
“In one case we had a bridge on I-5, the major interstate in Oregon, that was completely shut down for several weeks. We were routing traffic through a very small town,” says Paul Mather, highway division administrator and bridge oversight committee chairman at ODOT. “That was going to be our reality for the future.”
Oregon's legislature acted decisively. In 2003, it passed the Oregon Transportation Investment Act III (OTIA III), which allocated more than US$1 billion for the state's largest infrastructure upgrade program in 50 years. In an unprecedented move, it also mandated that ODOT outsource the ambitious program to the private sector. The 10-year, US$1.3 billion contract was awarded to the Oregon Bridge Delivery Partners (OBDP), a joint venture between Fluor Corp. and HDR Engineering Inc.
The OBDP team was charged with repairing or replacing 365 bridges, handling everything from program and construction management to design engineering and final inspection. A compressed timeline and fixed budget meant the team had to search for efficiencies while maintaining safety standards for both project site workers and millions of motorists and truckers. The team also had to manage hundreds of contractors and a bevy of stakeholder groups—from legislators to homeowners—scattered across the state.
And OBDP was doing all this while trying to forge a healthy working relationship with a wary ODOT.
“There was certainly some skepticism on the part of ODOT in handing over the largest construction program they've seen since the interstate system was built to a private firm,” says Byron Perry, deputy program manager for design and construction at HDR for this project. “From a cultural standpoint, in terms of winning the hearts and minds of ODOT, it took time.”
“We developed a program to look at impacts from traffic to try to [find] when the best time is to do a closure.”
—Michael Hatchell, Fluor
A NEW WAY OF DOING BUSINESS
ODOT retained overall responsibility and decision-making powers through-out the program, but its role was focused on strategic oversight. So OBDP leaders put the focus squarely on being communicative and transparent, especially given many of its program management approaches were new to the ODOT team.
PHOTOS COURTESY OF HDR, INC.
“We had numerous meetings with ODOT and with the stakeholders to tell them what the program was going to be and where we're trying to go,” says Michael Hatchell, project director and program manager from 2004 to 2007 at Fluor. “So they were always aware of what we're trying to do at any given time.”
OBDP worked aggressively to avoid scope creep, streamline project schedules and minimize driver inconvenience. For example, OBDP established a single environmental permit process that involved agreements with 11 state and federal agencies. The move not only prevented schedule delays, it saved US$73 million. OBDP also created an exception process to fast-track 275 design changes, avoiding US$700 million in costs while adhering to ODOT and federal design standards.
To improve its estimating accuracy, the team enlisted economists to examine commodity prices and bids on similar past projects. Diving into that data proved valuable. When construction projects for the 2008 Beijing Olympics drove up the price of recycled steel, for example, the team incorporated price sensitivity analyses into its estimating process. That helped it forecast the impact of rising prices on bids. And over the program's duration, the margin of error for estimates got smaller and smaller.
One of the team's most effective ways of controlling costs and schedules was to bundle projects. Instead of fixing or replacing the most deteriorated bridges first or repairing them one by one, the team decided to consolidate projects into contracts of varying size.
“Most communities identify with their bridges in their towns. It's on their city logo, it's part of the culture.”
—Paul Mather, Oregon Department of Transportation
“The bundling process helped us manage the scope of the program by addressing similar deficiencies of similar bridges in similar areas,” Mr. Perry says.
Bidding became less cumbersome, too. “Instead of having to spend a lot of effort doing [multiple] bids, the contractor gets to do one bid,” Mr. Perry says.
The approach also leveled the playing field by allowing smaller local companies to compete, pumping dollars into the local economy. The end result: Nearly 90 percent of project funds went to local contractors. Overall, the program created 22,000 jobs, many during the worst financial crisis the U.S. has seen since the Great Depression.
“Many of our contractors relied solely on this program to keep their businesses alive,” Mr. Mather says.
Once the project launched, bundling created economies of scale. By buying materials in larger quantities, contractors received discount pricing—and could reuse some materials on other projects in the same bundle.
And by scheduling each bundle's projects into five stages, the team ensured at least one major east-west and north-south corridor remained open at all times.
Nailing the technical project management details was, of course, a must. But the team knew bridges are more than just a piece of infrastructure. “Most communities identify with their bridges in their towns. It's on their city logo, it's part of the culture,” Mr. Mather says.
Mindful of these strong connections, program leaders looked for creative opportunities to engage citizens. In Elkton—population 312—the team let high-school art students design images of wildlife and plants representative of the area for the bridges. The students also designed decorative pylons on the four corners of a bridge.
“This program gave them opportunities to put their fingerprints on the look and feel of the bridge to match what they wanted their community to be,” Mr. Mather says.
BIG WHEELS KEEP ON TURNING
Throughout the program, OBDP and ODOT were determined to maintain a safe and reliable transportation infrastructure for freight haulers, everyday commuters and workers on project sites. The team set safety standards for each project, requiring nondisruptive routes through or around the job site.
Looking to minimize traffic snarls, OBDP studied the impact of a project's lane closures down to the hour. “We developed a program to look at impacts from traffic to try to [find] when the best time is to do a closure,” Mr. Hatchell says.
In one case, contractors built the bridge off-site, adjacent to the old bridge, and then rolled it into place, reopening the bridge to traffic within 48 hours, greatly reducing impact on the traveling public.
To keep stakeholders informed, the team assigned specific communication requirements to each project based on its location, complexity and number of people affected. Some projects required monthly progress reports to ODOT and the state legislature, highlighting specific design, construction, diversity and environmental milestones.
Other project communications were more casual. The team executing one of the program's bigger projects, the Willamette River Bridge near Eugene, maintained ODOT's first blog, for example. The three-year blog kept the public in the loop with project events, schedule changes, and safety tips for bicyclists and pedestrians.
Some projects created risks beyond the hassle of longer drive times, and the team took proactive measures whenever necessary. Work at the Sandy River Bridge project site, for example, resulted in an increased risk of flooding during construction, so ODBP held public meetings to notify local property owners.
ODBP even helped some of these owners apply—and pay—for extra flood insurance, Mr. Hatchell says. The team set up a hotline for affected residents to obtain assistance with the insurance application process, and conducted additional outreach via mail, email and in-person visits.
PHOTOS COURTESY OF HDR, INC.
BLUEPRINT FOR CHANGE
When the program closed on schedule in late 2014, it was clear OBDP's risk mitigation and planning efforts had paid off. The initiative came in US$45 million under budget and serves as a blueprint for public-private partnership (PPP) projects.
“Other municipalities and other state organizations now look at PPPs differently,” Mr. Hatchell says. “Other departments of transportation are bundling a bunch of jobs together and having someone come in and manage those projects.”
In sharp contrast to how it was perceived by state officials before the program, many in the government now consider ODOT to be a project management role model.
“The 10-year window forced us to use some solid project management skills and really sharpen our skills internally, as well as learn from ODBP,” Mr. Mather says. “We're now looked at as a state leader in that and asked to be involved in many different projects.” PM
10 Years, 365 Bridges
2001: A routine inspection of state highway bridges in Oregon, USA reveals that many have cracks and other structural deficiencies.
2003: Oregon legislature passes the Oregon Transportation Investment Act III (OTIA III), allocating US$1.3 billion for a statewide bridge repair and replacement program. It also mandates that the Oregon Department of Transportation (ODOT) outsource execution to the private sector.
2004: ODOT awards the OTIA III program to Oregon Bridge Delivery Partners (OBDP), a joint venture between Fluor Corp. and HDR Engineering Inc. The first of 365 bridge projects launches.
2007: The financial crisis hits, scuttling Oregon's economy and employment levels. The bridge program becomes a safety net for the economy, providing jobs throughout the state.
2008: OBDP mitigates the impact of ODOT staff layoffs during the recession by shifting construction engineering inspection work to ODOT.
2014: The final bridge project is completed, wrapping up the program US$45 million under budget.
LIGHTS, CAMERA, ACTION!
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